The investment powerhouse Blackstone is taking a major stake in Duluth-based NCR, just weeks after Blackstone and other investment groups reportedly considered buying the maker of ATMs and cash registers.
NCR, which has been trying to transform itself from a maker of hardware into a software and services company, had been reviewing “strategic alternatives,” that included divestitures and reportedly even a sale of the company. At the same time, NCR has inked a deal to develop a new headquarters campus in Midtown Atlanta near Georgia Tech.
Under the deal with Blackstone, the investment firm will invest $820 million in NCR in exchange for preferred shares that are convertible into common stock at a price of $30 per share, which NCR said is an 18 percent premium to the 30-day average trading price as of Wednesday. It would amount to an 17 percent stake in NCR.
As part of the deal, Blackstone also gets two seats on NCR’s board, which is being expanded to 11 directors from nine.
In a news release, the company said it will work with Blackstone to grow its software revenues and transition to more cloud-based products and services, “expand margins through lean manufacturing” and work to maintain its financial flexibility.
What that might mean in terms of any affects on jobs in Georgia or elsewhere is not immediately known.
NCR Chairman and CEO Bill Nuti said in the announcement that a partnership with Blackstone “is the best way to accelerate NCR’s transformation and build long-term shareholder value.”
“Blackstone is an experienced technology investor with a long-term perspective that can help us continue to drive our higher-margin software-related revenue, deliver world-class service globally, optimize our manufacturing processes and supply chain, and rationalize costs,” he said. “This investment is a strong vote of confidence in our long-term strategy and future growth potential, and it will enable NCR to return significant cash to those shareholders who want to monetize their investment in the near term while preserving our ability to fund growth opportunities and increase shareholder value in the years ahead.”
NCR also announced plans for a $1 billion stock buy-back beginning tomorrow, using proceeds from the Blackstone investment and cash on hand.
“NCR has made tremendous progress removing legacy barriers to growth and executing a corporate transformation focused on extending its product capabilities into new areas of software and services. NCR is well positioned to continue to win market share and deliver exceptional value to its customers,” said Chinh Chu, a senior managing director at Blackstone and an incoming NCR board member.